Mumbai: Withdrawing the Rs 2,000 bank notes will check black money to a great extent, former Reserve Bank Deputy Governor R Gandhi claimed on Friday. He claimed that people are hoarding the high-value currency, PTI reported.
R Gandhi led the currency department when the monetisation of 2016 took the stage. He told PTI that there would not be any systematic impact on payments since the notes are not used in day-to-day payments, claiming that they are mostly done digitally.
But he thinks that the Rs 20,000 put on per exchange limit may lead to "operational inconvenience" as some people may have to make multiple visits to a bank branch.
Saying that one of the intentions of the 2016 demonetisation itself was to curb black money in the economy, R Gandhi reiterated that the current withdrawal would also back the same aim to a "great extend".
The Reserve Bank of India (RBI) regularly keeps on the reissuing currency of a specific denomination by launching a new series of notes under the same denomination to replace older currencies, R Gandhi said.
RBI announced on Friday its decision to withdraw Rs 2,000 banknotes from circulation. Existing notes in circulation can either be deposited in bank accounts or exchanged by September 30.
RBI said in a statement on Friday that the new decision is part of the "Clean Note Policy" of the Reserve Bank of India, The Indian Express reported.
RBI briefed that the notes are at the end of their estimated time life span of 4-5 years. The total value of these notes in circulation declined from Rs 6.73 lakh crore on March 31 2018 (its peak circulation) to 3.62 lakh crore on March 31, 2023. The denomination is observed to be not commonly used in transactions.